Do Blue-State Policies Lead to Prosperity?

The New York Times publishes a lot of dumb stuff, but this article by Jacob Hacker and Paul Pierson titled The Path to Prosperity Is Blue is a classic. It purports to show that liberal policies at the state level lead to “broad prosperity,” but the piece’s logic is laughable.

To begin with, the authors purport to be measuring prosperity, but of the five statistics they try to relate to state policies–median household income, life expectancy at birth, taxation of the top 1%, number of patents issued and percentage of the population that has a bachelor’s degree–only one, median household income, even vaguely purports to measure a state’s economic strength. And here, the red and blue states fare equally: of the top 19 states, nine are red or red-leaning, while ten are blue or blue-leaning.

Second, the authors’ division of states into red and blue is based solely on their votes in recent presidential elections. This is irrational. Presumably the authors would not claim that voting for a Democrat is enough to make a state prosperous. Rather, they are using presidential votes as a proxy for a wide range of state tax and regulatory policies. Doing so is either ignorant or deliberately deceptive. Various groups (e.g., the Tax Foundation) have gone to great lengths to figure out how states compare with respect to, for example, overall personal and corporate tax burdens. Regulatory burden is harder to measure, but that too has been estimated. Hacker and Pierson simply ignore all of these easily-available data and assume that any state that votes for a Democratic president is “blue” with respect to all of its own policies.

Their assumption is false. Washington State is a good example. The authors classify Washington as deep blue and count Washington’s household income, life expectancy, patent rate and high educational attainment as evidence of liberal superiority. But Washington doesn’t have a personal income tax. As far as taxes are concerned, Washington is a red state. And sure enough, the Times piece lists Washington among the five states that tax the top 1% of income earners the least. So in this important instance, they count successful red state policies as though they were blue.

Further, the authors’ assumption that liberal or conservative governmental policies are responsible for variations in life expectancy in the 50 states is ridiculous. If you really could live years longer by moving to a blue state, presumably many people would do so. Yet the migration is overwhelmingly in the opposite direction, because people move in search of economic opportunity (which, you may recall, was supposed to be the subject of the Times article).

Hacker and Pierson credit deep-blue California with the fourth-longest average life expectancy. Another victory for liberalism, in their book! But what explains California’s life expectancy numbers? Is it high taxes and lots of regulations? No.

California’s white, Hispanic and African-American residents have roughly average life expectancies. So do California’s Asian citizens, but Asians (regardless of what state they live in) have extraordinarily long life expectancies. And California is home to an exceptionally large number of Asians. California’s Asians don’t live appreciably longer than Alabama’s or Louisiana’s, but there are vastly more of them. So is California’s overall longer life expectancy a triumph of liberalism? No, it is an artifact of demographics.

On the other hand, what states have the shortest life expectancies? The bottom 12, according to Hacker and Pierson, are all red or red-leaning states. So conservative policies kill, right? Wrong. Putting aside the fact that none of them have many Asians, eight of the 12 states with the shortest life expectancies are among the top ten in percentage of smokers, while six of the 12 states with the longest life expectancies are among the bottom ten in tobacco consumption. The Times isn’t measuring the success of liberal policies. It is measuring, along with demographics, the extent to which people in different regions of the country smoke.

We could go on and on, but frankly, this pathetic op-ed isn’t worth any more attention. But there is one more point I want to make.

The only statistic invoked by Hacker and Pierson that even remotely measures economic vitality is median household income. Yet here, too, non-economic factors intrude. Most obviously, how many income earners are there in the household?

The Times authors rank Minnesota high on the household income measure, eighth among the states. Yet, this has very little to do with the strength of Minnesota’s economy. Minnesota’s average wage per job is almost exactly equal to the national average, below average if cost of living is taken into consideration. But Minnesota has a great many intact, two-parent families. The state is second only to Utah in that regard. As a result, Minnesota has many more two income and three income families than the national average. It is conservative cultural and social mores, not liberal economic policies, that give Minnesota a relatively high median household income.

On Monday, my think tank, Center of the American Experiment, will release a definitive study of Minnesota’s economy by Joseph Kennedy, a PhD economist and former chief economist for the U.S. Department of Commerce. That report will provide a far more authoritative account of how blue state policies have impacted economic growth than the feeble effort in today’s New York Times. Stay tuned!